Housing Costs take off again
In a week where the pollies played games with the CPI target which the RBA uses for setting interest rates, the latest data came out for median house prices. It shows alarming jumps in prices for Melbourne, Brisbane and Adelaide. Melbourne prices jumped 9.6% in the September quarter and 19.5% over the year. But according to the CPI, housing costs for the year were up only 4.2%. We don't have space here to discuss the history of CPI housing component 'fiddles'.
Australian Property Monitors reports that asking rents for houses in Melbourne rose by 16 per cent to $330 per week for the year to September while rents for units climbed 12 per cent to $290 per week. Asking rents for Sydney houses have increased by 14 per cent to $400 per week (the first time the $400 mark has been reached) and units by 12 per cent to $380 per week for the year to September. Clearly demand is greater than supply as Generation Y finally moves out of home and Gen X wants something bigger with the 'one for your country' baby about to arrive.
The recent wage campaign by Melbourne nurses, now to be followed by Victorian teachers, heralds the wage inflation break-out many were fearing. No one is really to blame for this. It's just the outcome of some recent years of largess at the CEO level while the basic services army has been neglected.
Posted Saturday, 27 October 2007
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